Lesson 1

Question 1

What is utility

Answer 1

The benefits someone gains from something

Question 2

Why can’t we always maximised utility?

Answer 2

Information failure
Affordability
Degree of adictiveness
Altruism

Question 3

Information failure

Answer 3

One party ( buyer or seller ) may know more about market conditions than another eg 2 nd hand cars ,jewlery
Watches

Question 4

Degree of adicitivness

Answer 4

Later regret implies utility was not maxismised ( consumer are not rational utility maximises

Question 5

Affordability

Answer 5

Consumers may know which products they are willing to purchase but not able to

Question 6

Alturism

Answer 6

Selfless act of helping other without expecting anything in return

Eg giving a friend a lift in a car
Or giving money to charity

Question 7

What is positive statement ?

Answer 7

Can be tested

Statement of fact

Question 8

Normative statement

Answer 8

Contain value of judgment
Cannot be tested